Tuesday, June 13, 2017

A Nation of Immigrants? Not Unless the Bondholders Agree.

"If we ever close the door to new Americans, our leadership in the world would soon be lost." -- President Ronald Reagan

America has always claimed it is a nation of immigrants, but we are discovering it is a nation of immigrants when it needs them--especially ones with technical skills--and hostile to them when convenient.  Is America's openness to immigrants based on whether it can exploit their labor? 

Over 150 years ago, America needed immigrants to farm and work in the fields, so it got them--illegally.  Their legal status didn't matter. America needed railroads, too, but when the Chinese proved to be better than the natives, America decided it disliked competition and passed the Chinese Exclusion Act of 1882 restricting immigration.  

Today, America is restricting immigration directly by spending more on immigration enforcement, even against law-abiding residents with American children, and indirectly by restricting H1B and other visas. It's true if one country designs its school system around math and science instead of trying to teach all things to all people, it will have an advantage over a Dewey-designed system that prizes social control above practical skills. Yet, America's response to being outgunned, outmaneuvered, and out-educated has always been the same: do anything but change the status quo unless absolutely necessary, demonize the other side, and pass laws restricting their ability to compete.

Before you get too upset, it's useful to realize America has always used the law to defend the status quo, whether it was Buck Leonard playing baseball too well in the Negro Leagues and being excluded from MLB; Muhammad Ali correctly analyzing the Vietnam War better than the so-called experts and having his title taken away; Jackie Robinson getting court-martialed by the military; Swedes and Norwegians in Minnesota discriminating against immigrant Finns; and so on.

Modern America uses land-use restrictions to prevent building mosques while allowing churches with political connections an easier process; restricts H1B visas but does little to reform K-12 educational outcomes; sends PhD graduates back to their home country even if their skills are useful and their character good; protects government teachers, mostly native-born, from accountability; attacks charter schools, Uber, and Airbnb because they take funding away from existing players with political connections; and does not adequately audit tax exempt entities that do not necessarily promote the public good. (How many students could afford to pay for colleges, which are nonprofits even if public or private, without receiving government-backed student loans? How many churches could show they spend most of their funds on charitable services serving the public rather than their own members?) 

Ironically, Americans able to effectively protest and change existing rules were often protected by the police or the military--the same Establishment upholding those same rules. Muhammad Ali discovered boxing after a white police officer introduced him to the sport, which later put him under the protection of Louisville's most established lawyers. Baseball's #42, Jackie Robinson, was drafted by the Army in 1942.  Malcolm X? Murdered. MLK? Killed.

Edward Snowden, the whistleblower who exposed the NSA? Ex-military, from a military family, and ex-intelligence. He's having fun with his girlfriend in Moscow. Daniel Ellsberg, the whistleblower who brought down President Nixon and helped end the Vietnam War? Marine Corps officer (First lieutenant). Still alive and very much an activist.

No matter what, the Establishment prevails, which always favors insiders rather than outsiders such as immigrants. Today, barriers are systemic, and the Establishment prevails through legal loopholes, legal restrictions, and high prices. Resistance to change is a feature, not a bug, of America's debt-soaked system. It prioritizes bondholders getting paid in order to continue to keep taxes lower than otherwise possible and government employment relatively constant or growing. When your economic system depends on ensuring bondholders are paid every three months or every month, openness to outsiders who cannot contribute immediately to the tax base becomes more difficult, long-term thinking be damned.

Let's take a more personal example.  Want to be a politician and help society? First you have to go to law school.  How much is law school? 40,000 USD a year, including room and board? You're going to need lots of loans. Once you're saddled with six figures in student loans, are you going to protest your professor or government official, who may be able to assist you with job placement? Even if you wanted to protest, how would you first gain the relevant experience necessary to determine which ideas weaken accountability and which ones might work? If one day, your professor or government official decides fewer rather than more immigrants are ideal, what can you really do?  You're in debt, and student loans are non-chargeable in bankruptcy. You may want to assist immigrants, but what if that immigrant is going to compete against you for a job or divert revenue that might otherwise help subsidize your loans? Having debt automatically limits options because it forces you to prioritize your own financial interests rather than the public good or long-term outcomes. When your entire society runs on debt, the Establishment will accept outsiders only if it benefits the insiders--and their ability to pay off accumulated debt. 

Slavery was wrong in America even when some slaves were allowed freedom and the ability to migrate.  Slavery is wrong today, even if its form and shape have been modified to resemble the smiling faces of a college admissions employee, a bank's mortgage officer, and a retail employee asking if you open a credit card account.  And so it goes. 

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